Patent Challenge and Generic Entry (Job market paper)
Joint with Hanlin Zhao
Pharmaceutical innovation depends on strong primary patents that allow originators to recoup R&D costs. However, drug companies often engage in evergreening that prolongs patent protection by filing follow-on patents with little therapeutic gain. We study a policy lever that works with market forces to screen out weak follow-on patents: the Hatch-Waxman Act, which incentivizes challenges to evergreening patents by granting the first successful challenger a period of marketing exclusivity. We investigate how the length of first-filer exclusivity shapes generic firms' incentives to initiate challenges, which can curb the extra monopoly protection created by evergreening while preserving incentives for genuine discovery and protecting consumer welfare through earlier generic entry. Using a two-stage structural model that endogenizes challenge and entry decisions, we estimate the fixed costs of generic entry with moment inequalities. We find that the current 180-day exclusivity raises challenge rates by about 4 percentage points. Extending exclusivity primarily activates challenges in markets that would otherwise go unchallenged: a two-year exclusivity increases the challenge rate to 15.38%. Effective exclusivity is highly heterogeneous across therapeutic classes: reaching a 20% challenge rate requires roughly two years for antimicrobials but less than one year for blood products or genitourinary drugs.
Consumer Demand with Unobserved Stockpiling and Intertemporal Price Discrimination
Joint with Pierre Dubois and Thierry Magnac
Tax Exemption for Feminine Sanitary Products: Evidence from the U.S Market
Feminine sanitary products are essential for women; however, unlike other necessities that are tax-exempt, they are often subject to taxation. This paper employs a Difference-in-Difference approach to examine the impact of repealing the tax on sanitary products in the U.S. market. The results suggest an incomplete pass-through of the tax exemption. Nevertheless, the repeal did not significantly improve affordability once consumers’ substitution from smaller to larger pack sizes is taken into account. Furthermore, we evaluate policy options using a constant expenditure model to compare the tax repeal with four alternative interventions. We find that providing low-income consumers with a $2 coupon offers the greatest improvement in product access, but at the cost of higher overall prices.
Prescribing Behavior in Medical Deserts
Joint with Philippe Choné, Pierre Dubois, and Lionel Wilner